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LOGO OF THE
NEWS & RESEARCH FROM THE AFRICAN CONTINENT
(#27 / 2018 - 17 September 2018)
www.africantextilesandapparel.com
Hawassa Industrial Park (Ethiopia): current employment approx. 20,000; 85% women
Hawassa Industrial Park (Ethiopia): US$100m in exports projected for 2018
Hawassa Industrial Park (Ethiopia): 52 factory sheds, 20 investors from >15 countries
SOURCE:
PVH in East Africa: Past, Present and the Future
by Cen Williams, PVH Hub Leader (Africa & Middle East)
Presented at International Textile Manufacturers’ Federation annual meeting (Kenya)
8 September 2018
 
NEWS

LESOTHO – CLOTHING INDUSTRY SURGE, September 2018
CORRECTION: The massive job losses that I feared would take place in the aftermath of the massive 37.4% minimum wage hike (implemented with effect from 1 September 2018) in Lesotho are not taking place. I was wrong! Why could this be the case?

Comment
The gods must be smiling on Lesotho – well at least in the short to medium term! But who knows how they will feel in the long term!

I believe that there are a combination of factors that may explain why there have not been any factory closures ... or for that matter retrenchments:
  • the prime Lesotho knit garment firms (i.e. those that get the orders from global agents, not those firms that traditionally act as CMT sub-contractors to prime firms) want to ensure that they complete the orders for their customers. If they drop these customers now it will prejudice them ever working for any of these customers ever again.
  • the SA Rand (and thus Loti - the Lesotho currency which is tied at pat with the South African Rand) has lost significant value against the US$ which makes the new wage rates somewhat more affordable. On 1 April 2018 (when the wage increase should have been implemented) US$1 = ZAR11.79; on 13 September 2018 US$1 = ZAR14.82.
  • USA apparel retailers continue to be nervous about Trump’s decision to impose additional customs tariffs on Chinese made goods. When Trump started this process I believe that many USA apparel retailers thought that clothing goods would be in the additional customs duty firing line. At that point in time many retailers were already looking for non-China destinations where they could place apparel orders. Today I believe that USA retailers are still incredibly nervous and would be comfortable to pay slightly more for Lesotho production in order to keep their orders ticking in at a reasonable cost.
Of course the Lesotho government and its garment manufacturers must not be complacent. Going forward they must look to increasing their productivity - a good tax incentive will assist here (perhaps the existing training incentive should be adjust from its current 125% tax deduction to 175%). Also. The Lesotho national Development Corporation (LNDC) should consider selling some of their industrial premises (and properties) to existing manufacturing investors as this will also anchor the owners of these firms in Lesotho. Existing premises should be sold with the proviso that they are used for manufacturing purposes only - they should not become warehouses for imported goods. The funds raised could be reinvested by the LNDC in additional industrial infrastructure.
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It also appears as if the Nien Hsing group (which already employs about 10,000 workers in Lesotho's denim industry) is going ahead with the opening of a facility that will make womens/girls stretch yoga gear for export to the USA. The New Wide Group (which already has factories in Ethiopia and Kenya) is apparently also going ahead with the opening of a new garment making plant in Lesotho.


ETHIOPIA – PVH WINS SUSTAINABLE AWARD FROM US GOVERNMENT, 12 September 2018
The USA’s Department of State’s Bureau of Economic & Business Affairs announced the two winners for the 2018 Secretary of State’s “Award for Corporate Excellence”. Established in 1999, the award recognises USA companies that represent American values well in their business practices worldwide. Each of these companies is contributing to the growth and sustainable development of the local economies in which they work. In 2018, the ACE categories include: Sustainable Operations, and Women’s Economic Empowerment. One of the 2018 winners is:
 
Award for Corporate Excellence in Sustainable Operations
PVH Corporation (Addis Ababa, Ethiopia)
“PVH Corp., one of the largest apparel companies in the world, was the lead investor in a model industrial park in Hawassa, Ethiopia. The park features state-of-the-art fabric mills and apparel factories powered by renewable energy, beside a zero liquid discharge treatment plant. This industrial park expects to provide approximately 60,000 Ethiopians with work over the coming years. Currently, more than 80% of the employees are women, providing valuable opportunities given the country’s high female youth unemployment rate. The ultimate goal for PVH’s model industrial park is to provide a better future not only for the workers and their families, but also to inspire responsible industrialization across Ethiopia for the betterment of its entire population and the creation of a new market for USA goods.” READ HERE >>

Comment
Hmmmmmm getting an award from the Trump Administration – an Administration not especially well known for its progressive stances on environmental (and labour rights) issues!

PVH seemed to like the accolade - from its press release: "PVH is receiving the Sustainable Operations award as lead investor of a best-in-class apparel manufacturing facility in Hawassa, Ethiopia. The honor recognizes the company’s unwavering commitment to people, the environment and the communities where it operates."
SEE >>.

Of course going forward it will be interesting to see how the sourcing giant deals with a more focussed spotlight on its own Ethiopian production unit, and that of its Ethiopian manufacturing suppliers (
SEE >>) ... for surely this accolade will attract the attention of a number of eco-warriors, and labour rights activists.

PVH has done an excellent job in committing to the development of large scale industrialisation in Ethiopia. They should be congratulated for their remarkable achievements … perhaps they should even be considered for an award for this achievement. PVH has already, and I guess will continue to do so, create many thousands of jobs for Ethiopians.

However. There is another side to this story.

A zero “liquid” discharge industrial waste water treatment plant does exist in the Hawassa Industrial Park … but what happens to the sludge wastes left over by the treatment plant? I understand that it may be dumped in a nearby landfill that is not suited for handling the toxic by-product wastes (It may be the case that that Ethiopia does not have a single facility where such wastes can be properly disposed of). And on the treatment of workers. Is it true that some of manufacturing vendors in Ethiopian industrial estates have an informal policy in place which prevents employees who resign from one plant in the complex from finding employment in another plant in the industrial zone? And, let me not get onto the issue of minimum wages, except to say that improved wages will see companies being able to retain skills.

Of course the above problems are not solely PVH issues - they remain issues that must be addressed by all Ethiopian value chain manufacturers, by the global brands and retailers that give firms there orders, and by the Ethiopian government. And of course we should not forget the many international development organisations that have hitched their wagons to the Economic development miracle.
 
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UGANDA – COTTON DEVELOPMENT ORGANISATION TO CLOSE? 11 September 2018
Uganda plans to scrap dozens of its state-owned organisations in reforms aimed at preventing duplication of roles and the wastage of public resources. A Cabinet meeting chaired by the country’s President has agreed to dissolve some parastatals and merge others. In July 2017 the country’s President wrote: “Why have an agency when you have a department of government dealing with the same area of responsibility? Why have an Authority when you have department of government dealing with the same area of responsibility? Why have Boards for money-consuming units rather than money generating units?” One of the institutions facing closure or merger into a government Ministry is the country's Cotton Development Organisation (CDO). READ HERE >>


SOUTH AFRICA – TEXTILE UNION RESOLUTION ON CO-OPERATIVES, 17 September 2018
The Congress of South African Trade Unions (COSATU), South Africa largest trade union federation, will be holding its national congress on 17-20 September 2018 in Johannesburg. The Southern African Clothing & Textile Workers’ Union (SACTWU), its largest affiliate organising workers in the textile-clothing-footwear value chain, has submitted a resolution relating to the abuse by some employers of the country’s co-operative legislation. Some manufacturing enterprises, with the explicit knowledge and support of local apparel sourcing agents / design houses / apparel retailers, and perhaps local elements of the ruling African National Congress (ANC), have made their employees within their enterprises into co-operatives members. Members of co-operatives are excluded from provisions of South Africa’s labour legislation – meaning that they do not have to be paid the stipulated statutory minimum wages. The full draft SACTWU resolution can be READ HERE >> (see Resolution 2.28).


ETHIOPIA – CHINESE INVESTORS INTERESTED IN COUNTRY, 13 September 2018
The China National Textile & Apparel Council (CNTAC) has said that some of its members were interested in investing in Ethiopia. This was after a delegation of 52 of its members recently visited the country (prior to attending visiting . CNTAC’s president said he came to Ethiopia to undertake a feasibility study on the textile industry. He said, “Many Chinese textile entrepreneurs are interested to invest in Ethiopia because we have clear understanding of government policy, high efficiency, incentives and privileges and also the comparative advantage of developing textile industry in Ethiopia.” He said they are interested in investing in Ethiopia because of the availability of labour and raw cotton in addition to the country’s trade relations with Europe and the USA. READ HERE >>

Comment
... “availability of … raw cotton” - I think not! Well not at this point in time. Ethiopia remains a significant importer of cotton.


ETHIOPIA – FOUR NEW INDUSTRIAL PARKS TO BE BUILT, 4 September 2018
Ethiopia has announced plans to start building four industrial parks by the end of the year, according to Ethiopian Investment Commission (EIC). Belachew Mekuria, an EIC commissioner, said the government expects to start building parks at Jimma, Adama, Arerti, and Dire Dawa. According to the report, the industrial parks in Jimma and Arerti are expected to be built by China Communications Construction Company (CCCC), and in Dire Dawa and Adama the industrial parks will be built by the China Civil Engineering Construction Corporation (CCECC). According to the plan the Adama industrial park is expected to turn woolen fleeces into textiles. Ethiopia continues to build industrial parks despite the country's struggle with foreign currency shortages, and increasing concern on the part of foreign investors due to its high debt to Gross Domestic Product ratio. READ HERE >>


ETHIOPIA – LOGISTICS SECTOR OPENED UP, 4 September 2018
A landmark decision by the Ethiopian investment board has reversed a regulation that restricts foreign investors from operating in the logistics industry. READ HERE >>


ETHIOPIA – GERMAN SUPPORT FOR COMPANY, 3 September 2018
Seven years ago, Fassil Tadesse's textile company was producing around 20,000 garments a month. These days, with assistance from the German Corporation for International Cooperation (GIZ), it’s producing 20,000 garments a day. READ HERE >>


ETHIOPIA - POLITICAL REFORM PROCESS SECURES AGOA STATUS? 14 September 2018

After leading a congressional fact-finding trip to Ethiopia, USA Representative Christopher Smith said he's convinced the Horn of Africa country is making rapid progress toward democracy, thanks to new leadership. The congressman is the architect of the USA's H.R. 128, legislation which condemned human rights abuses in Ethiopia and outlined a number of reforms that the country must take to promote peace and democracy. The resolution passed in the House of Representatives earlier this year. READ HERE >>

Comment
This is good news. As has been reported in previous editions of the "African Cotton, Textiles & Apparel Monitor" it is known that the United States threatened (circa January 2017) to exclude Ethiopia from its list of African Growth & Opportunity Act (AGOA) eligible countries due to the country's deteriorating political situation. In response to this threat the Ethiopian government engaged a USA firm at a cost of US$150k per month. However since the appointment of a new Prime Minister, Abiy Ahmed, in April 2018 significant political reforms have taken place within the country; and peace deals have been signed Eritrea. Watching the speed of political transformation in Ethiopia brings back memories to me of the 1994 political transition in South Africa. This endorsement by a USA lawmaker, who has been at the forefront of USA criticism of the Ethiopian government, must go a long way to appeasing the minds of those who wanted Ethiopia to be ejected from the AGOA programme.

Meanwhile in Lesotho, the second largest AGOA apparel exporter, its government continues to battle with its political reform process required by the USA Administration as a condition for it retaining its AGOA eligibility.
The country's current political malaise - cabinet ministers being fired and resigning; governining coalition party members having disagreements with each other - does not augur well for a good outcome.


KENYA – AGOA, 11 September 2018

Kenya has often been hailed as a leading exporter of textiles and apparel to the USA through the African Growth & Opportunities Act (AGOA). This notion was underlined in last week’s annual conference of the International Textile Manufacturers Federation (ITMF – SEE >>) held in Nairobi, where Government officials pointed out Kenya’s strategic share of the global textile market. READ HERE >>


NIGERIA – US$2BN CHINESE VALUE CHAIN INVESTMENT, 11 September 2018
The Nigerian Federal government is already harvesting the benefits of the just concluded meeting on the Forum for African Cooperation (FOCAC) in China according to Nigeria’s Minister of Industry Trade & Investment who revealed that a US$2bn investment commitment into Nigeria’s cotton, textile and garment sector has been received from Chinese company, Rui Group. READ HERE >>


UNITED STATES – CUSTOMS TARIFFS ON CHINESE APPAREL? – 11 September 2018
The public comment period regarding the proposed list of US$200bn in USA imports from China ended on 6 September 2018. As part of that process, the American Apparel & Footwear Association (SEE >>) led or contributed to the following submissions:
  • Submitted joint letter (SEE >>) to the USA Trade Representative (USTR) opposing a proposal to levy border taxes on consumer and commercial products imported from China, signed by nearly 300 brands and companies.
  • Joined a letter (SEE >>) signed by 22 trade associations representing fashion related industries to express opposition on Tranche 3 of the China Section 301 tariffs.
  • Provided post-hearing comments (SEE >>) in conjunction with more than 150 other trade associations, representing all sectors of the economy, on Tranche 3 of the China 301 tariff procedures.
  • Filed post-hearing comments (SEE >>) in connection with the its 20 August 2018 testimony.
Approximately 6,000 comments were submitted during this period, and the administration has indicated that it will not make a decision on the US$200bn list until these comments have been reviewed. Meanwhile, the President indicated a willingness to add punitive tariffs on an additional US$267bn worth of USA imports from China. Source: AAFA Weekly Newsletter (11 September 2018).

Of course, as always, there is another side of the story. The USA's National Council of Textile Organisations (NCTO) has made it clear that it supports the USA President's decision to consider sanctions on Chinese made textile and apparel products.
READ HERE >>

Comment
The USA’s President’s tariff wars with China are most probably having a direct impact on Africa. As has been commented upon in previous newsletters many USA apparel retailers and brands have already started to look for alternate sources of garment supply. Its possible that Africa features as part of many buyer strategies. Of course if the USA does impose additional customs duties on Chinese made goods the African continent could be negatively affected as Chinese companies will need alternate markets – and dumping garments into Africa would be a good option.
 
----------------------------------------------

An excellent timeline on the Trump Administration's "trade policy" that has resulted in additional duties being imposed on Chinese made products can be found HERE >>.


DJIBOUTI – NATIONALISES PORT USED BY ETHIOPIAN EXPORTERS, 10 September 2018
Djibouti has nationalised the two-thirds stake in its Doraleh Container Terminal held by the Port of Djibouti. In February 2018 Djibouti ended a contract with DP World, one of the world’s biggest port operators, to run its Doraleh Container Terminal (DCT), and seized control of the terminal. READ HERE >>


GLOBAL COTTON TRADE - US AGENCY REPORT, 12 September 2018
The USA’s Department of Agriculture's (USDA) Foreign Agricultural Service (FAS) produces a monthly publication entitled "Cotton: World Markets & Trade". This month’s report includes data on USA and global cotton trade, production, consumption and stocks, as well as analysis of developments affecting world trade in cotton. READ HERE >>
BERZACKS ADVERT.  [This image can be seen if you enable

SOUTH AFRICA – REVIVING MOHAIR PRODUCTION, 12 September 2018
Q = “How has the People for the Ethical Treatment of Animals' (PETA) recent claims of animal abuse in mohair production affected the local industry?”
A = “The organisation has structured information to suggest that the malpractice of a few isolated farming incidents provide a true reflection on SA’s entire Angora goats farming community. This isn’t so, but we abhor any incidents of the mistreatment of animals and agree these allegations should be properly investigated. South Africa produces more than half the world’s mohair and any boycott would have a devastating effect on the industry, the animals and the thousands of people it employs. We believe that it is time for full supply chain visibility so that buyers can trace mohair fibre back to individual farms. This would also create value for producers and consumers.”
READ HERE >>


ETHIOPIA – CHINESE INVESTMENTS, 2 September 2018
The Ethiopia Investment Commission (EIC) has licensed 1,294 Chinese investment projects during the Ethiopian Fiscal Year 2017/18 that ended July 7, an Ethiopian official said. The Communications Director at EIC said the Chinese investment projects make up about 24.8% of the total investment licenses the east African country gave in 2017/18. Ethiopia licensed 5,217 Investment projects during the fiscal year 2017/18 worth US$3.7bn. READ HERE >>

Comment
Undoubtedly many of these investments were in the apparel sector. In my experience there is often a major gap between the initial claims (e.g. value of investment / jobs to be created / exports of numbers of investors / value of exports); and what actually happens. Often exaggerated claims are made by national investment (and export) promotion authorities, and sometimes even some of the donor driven development projects.


ETHIOPIA - A NEW LIFE FOR BRITISH DEVELOPMENT PROJECT? September 2018
The British taxpayer has put a huge amount of financial resources into developing Ethiopia's cotton, textile and apparel value chain over the past five years. They have done well at their job. Their main development organisation active in the value chain has been Enterprise Partners (EP - SEE >>) - a development project managed by DAI. EP has, perhaps, less than 18 months left of UK funding. Now the UK's Department for International Development (DFID) has issued a tender which, among other issues, asks the chosen tenderer to: "Review the pros and cons of converting Enterprise Partners into a Trust, with a long term mandate, a degree of independence from development partners, scope to secure funding from a range of development partners etc".

A similar DFID funding reliant, arms length, development project trust operates in East Africa - Trademark East Africa. Could the UK government have more permanent development project (with significantly resourced eyes and ears) on the ground in Ethiopia with the conversion of EP into a Trust?
 
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FEATURE
SOUTH AFRICA'S
RETAIL CLOTHING, TEXTILE, FOOTWEAR & LEATHER
VALUE CHAIN STRATEGY DEVELOPMENT
THE 'MASTERPLAN'

As was reported in the last edition of the "African Cotton, Textiles & Apparel Monitor" a number of South African cotton-textile-apparel-footwear-retail value chain stakeholders are currently engaged in a process that will lead to the development of “Masterplan” for firms in the industry. This “Masterplan” – essentially a value chain development strategy for a defined niche of the broader cotton-textile-apparel pipeline – will run between 2018/19 until the year 2030.

A management super structure has been created called the ​"Retail-CTFL Masterplan Project Industry Reference Group​ (IRG)"​. This appears to be composed of: i) Government / parastatals (the SA's DTI and the IDC); ii) Trade Unions (SACTWU, NULAW); iii) 'Fashion' Retailers: NCRFSA; iv) Employers/manufacturers: Cotton SA, TEXFED, SAA-A, ATASA, AMSA, Hometex. Some groups joined relatively late; a huge swath of the value chain is not represented; and the broader public consultation process has been weak. (NOTE: have problems with the acronyms? Contact me!)
 
(The comments made here under reference a "draft" PowerPoint presentation prepared by the "Masterplan" consultants - circa late August 2018.)
 

 

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ADJUSTING SOUTH AFRICA'S (SACU) CUSTOMS TARIFFS FOR THE
RETAIL-CLOTHING-TEXTILE-FOOTWEAR-LEATHER VALUE CHAIN
 
The "Masterplan" consultants make proposals related to how the customs tariff structure should look for the industry. They propose the following:
The consultants also propose that all customs tariff rebates for the value chain should be eliminated.

The consultants state in their PowerPoint that the changes are necessary because "South African tariffs are excessively high" – and this raises the “arbitrage” rate, which impacts upon legally compliant businesses, and which raises value chain input cost. They state that tariff increases represent remedy failure; and that rebates result in excessive leakage.

I should imagine that many of South Africa's retailers would have been ecstatic about the proposal to reduce customs tariffs on clothing. Of course regional value chain manufacturers (fabrics, garments, garment trims) and value add services suppliers (e.g. commission laundries, screenprinters) may be very worried.

I would be interested to know whether these recommendations to reduce tariffs were made on the basis of an impact analysis - or were they made on the basis of some orthodox economics, or merely were made in order to make some apparel retailers satisfied!


In my view some of the textile customs tariffs of the Southern African Customs Union (SACU) should not be place - as the products which they apply to are not manufactured anywhere in the customs union. It is these duties that could be removed - in some cases reduced to MFN 0% or reduced to 0% via the creation of a customs tariff rebate.

No doubt some members (what few they have left) of South Africa's Textile Federation (TEXFED) will protest loudly. How often have I heard some of their members claim they can make product "X" - even in the smallest of runs. Some textile manufacturers in South Africa should grow up! They cannot claim to be able to make so many textile products when they know they cannot make some product lines economically. Telling potential customers that they can make product "X" ... when they have not made that product in the past 10 years is doing a massive disservice. The consultants would have been better off proposing the elimination (perhaps by putting in place rebates) of customs duties on a tight range of woven fabrics; and once this had been successfully done then moving onto to a second category of textile products; and then a third; and then a fourth; etc.
 
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SOUTH AFRICA'S VALUE CHAIN INCENTIVE SCHEMES

"REVIEW THE EXISTING PROGRAMMES FIRST
THEN DEVELOP AN INDUSTRY DEVELOPMENT PLAN!
"

PART 1 - THE PRODUCTION INCENTIVE PROGRAMME

The “Masterplan” consultants make recommendations related to a number of existing government value chain support (i.e. incentive) interventions that are funded with huge resources emanating from the public purse (in excess of R3.5bn (US$234.5m). They make, in their most recent PowerPoint presentation, comments about these interventions and they offer some suggestions as to what they think should be done to improve their working.

It seems incredulous that they do this when these interventions, to my knowledge, have never been subject to comprehensive independent reviews. These reviews would have been able to provide verifiable data as to how successful (or not) these schemes have been, and would have been able to advise if the incentives should be completely revised, tweaked, or dumped.

Of course this is hardly the fault of the consultants. Its clearly the fault of the South African Department of Trade & Industry (DTI) – for if they had been doing their job properly, they would have ensured that annual mini reviews were undertaken; and then comprehensive independent reviews were done at least every four/five years. The recent "review" of incentive schemes released by the DTI in September 2018 is clearly not good enough SEE >> (see: "2017/18 Annual Incentive Report"). That these independent, publicly available, reviews most probabbly do not exist does not surprise me though – for the DTI was never the brightest show in town. In my experience (and I have worked with them from the early 1990s) it has generally not managed its textile and apparel portfolio that well. However I must admit that under Minister Davies (the current trade and industry minister) things have improved markedly compared with the regimes of his predecessors. I guess though that the Davies' improvement bump was, in part, also spurred on by the impassioned interventions of Economic Development Minister - the hardworking Ebrahim Patel (he was a long time trade unionist in the Southern African Clothing & Textile Workers Union (SACTWU)).

It does surprise me that South Africa’s Finance Ministry also never asked for independent reviews of these taxpayer funded interventions – given the billions of Rands that it channeled, via the DTI, into the textile and apparel value chain. Do they give money out without ever checking, in detail, the efficacy of their handouts?

The best we have related to the Production Incentive Programme (PIP) element of the Clothing & Textiles Competitiveness Programme (CTCP) are ten "puff piece" firm profile "success stories" (SEE >>) - infact they are so "puff" it could be a dating site! The same CTCP website (which I presume is managed by the Industrial Development Corporation (IDC)) has space for "Annual Reports" - but its blank; ... no annual reports are listed - is this an oversight? or do they not exist?
 
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According to the Industrial Development Corporation (IDC) – the managers of the PIP programme (SEE >>) – the: “PIP aims to help the industry upgrade its processes, products and people. The programme is expected to move the industry up the value chain to activities that are far more sustainable than competing against "sweatshop" labour practices and pervasive government subsidisation in other developing countries. The PIP is meant to encourage and support upgrading and competitiveness improvement programmes in the sector. The PIP consists of an Upgrade Grant Facility, which is meant to focus on competitiveness improvement. The PIP is a market-neutral incentive offered to the sub-sectors listed below, resulting in an incentive benefit equal to 7.5% for the year based on a company's Manufacturing Value Addition.” The PIP is available to the following: clothing manufacturers; textile manufacturers; cut, make & trim (CMT) operators; footwear manufacturers; leather goods manufacturers; leather processors (specifically for leather goods and footwear industries); and, design houses (provided the design house partners with one or more CMTs).

In their August 2018 PowerPoint presentation the “Masterplan” consultants observe that there is uncertainty in the industry as to the continuation of the programme; and then they recommend that it runs for a further 3 years (1 April 2019 to 31 March 2022) whereupon the PIP should be reviewed.

I have no doubt the DTI’S CTCP PIP incentive has done much good … but prior to extending the programme again it MUST first be independently reviewed. The independent consultants (with no ties to the “Masterplan” consultants) should also be required to make recommendations as to how the incentive scheme can be refocused. The amount of funds allocated for the review should be substantial. The views of the consultants should then be deliberated upon by government policy officials, together with stakeholders (retail, industry and trade unions). The final report should be given to the "Masterplan" consultants.

Given the amount of public money involved its disappointing that the PIP is now the subject of proposal that amounts to little more than “road side repairs”. To extend a publicly funded incentive programme without a full independent review is illogical; to commit to a “Masterplan” without a thorough understanding of the successes or otherwise of a core incentive initiative would be similarly illogical. Taxpayer funds are sure to be wasted.

In my view the elements of an independent review of the PIP would include collecting a range of core data:
  • the number of firms supported - broken down per value chain sub-division of cotton, textiles, apparel, garment trims, home textiles, footwear, "general leather goods", and, other.
  • the amount (in public sector Rands) of support granted, per year, to firms in the above categories; the amount of additional private sector funding leveraged by the scheme; whether firms also got funding from other government institutions (e.g. the IDC, the National Empowerment Fund (NEF); from various provincial development funding agencies; etc).
  • the number of jobs created and saved (per year; per value chain sub-division) to firms in the above categories.
  • a firm-by-firm review of the top five success, as well as the biggest five failures (e.g. caused by anything but including fraud, or poor commercial decision-making, etc).

Then the consultants should produce a detailed output-to-purpose evaluation that should include some of the undermentioned items:
  • the PIP's overall success in terms of jobs created; and also in jobs saved (although this latter figure could lead to all sorts of absurdity).
  • an indication as to whether any firm investment may have taken place even if there was no public funding.
  • recommendations as to how the PIP scheme may be better administered (there is always room for improvement!) in order to ensure that financial failures are reduced, and the programme’s objectives are met.
  • recommendations as to how the PIP's rules may be tweaked / completely reworked in order to ensure a more successful value chain.

Finally – in the pursuit of transparency – a redacted (company identifiers excluded) version of the review should be released to the public.
NEXT WEEK!
THE (DRAFT) MASTERPLAN AND THE TAXPAYER FUNDED
CLUSTER PROGRAMMES
&
SECTORAL EDUCATION TRAINING AUTHORITY
 
 
TABLE OF THE WEEK
SOUTH AFRICA’S COTTON CROP
The 8th estimate for the 2017/18 production year indicates a cotton crop of 192 426 lint bales for South Africa – an increase of 148% over the previous season, and 1% up from last month's estimate. Dryland and irrigation hectares show increases of 157% and 171% respectively over previous year mainly due to the more favourable prices of cotton in relation to competitive crops but also due to renewed interest in cotton production.
TABLE - COTTON PRODUCTION IN SOUTH AFRICA.  [This image can be seen if you enable
SOURCE: "Cotton Market Report". Cotton South Africa, 6 September 2018.
 
RESEARCH

Rwanda: Responding to the US Threat to Remove AGOA Preferences”. and “Uganda: Responding to the US Threat to Remove AGOA Preferences”. both by Garth Frazer, Victor Steenbergen. International Growth Centre (IGC). Policy brief 43427. October 2017 (released 23 August 2018).

Synopsis: The second-hand clothing ban in the East African Community (EAC) is a policy whose proposed goal is to spur the development of the local EAC apparel industry. The USA Administration, under President Donald Trump, has threatened to remove trade preferences that are provided to EAC countries under the African Growth & Opportunity Act (AGOA) if they do not reverse the tariff increases on second-hand clothing imports and publicly confirm that there is no intention to move to a ban. In response to this threat, Kenya decided to break from the EAC position and unilaterally revert to the pre-2016 tariffs and confirmed publicly on 30 June 2017 that it did not intend to proceed with an outright ban. This means that Kenya is no longer subject to the AGOA out of cycle review. This project evaluates the options available to Uganda and Rwanda and the potential impacts of reverting to pre-2016 tariffs and not rescinding the ban on second-hand clothing. See the full Rwanda policy brief HERE >> and see the full Uganda policy brief HERE >>.
 
 
UPCOMING EVENTS
  • Apparel Sourcing Paris - Trade Show - 17-20 September 2018. Paris, France. For more information: www.apparelsourcing.fr.messefrankfurt.com
  • International Cotton & Textile Conference - Conference & Trade Show - 27-29 September 2018. Koudougou, Burkina Faso. For more information: SEE HERE >>; but also SEE HERE >> and SEE HERE >>
  • Africa Sourcing & Fashion Week (ASFW) - Trade Show - 1-4 October 2018. Addis Ababa, Ethiopia. For more information: www.asfw-online.com
  • Maroc Sourcing 2018 - Trade Show - 11-12 October 2018. Marrakech, Morocco. For more information: www.marocsourcing.ma
  • Textile Exchange Sustainability Conference - Annual Conference - 22-24 October 2018. Milan, Italy. For more Information: www.textileexchange.org
  • Destination Africa - Trade Show - 17-19 November 2018. Cairo, Egypt. For more information: www.destination-africa.org
  • ATF Expo - Trade Show - 20-23 November 2018. Cape Town, South Africa. For more information: www.atfexpo.co.za
  • 77th Plenary Meeting - International Cotton Advisory Committee (ICAC) - Annual Conference - 2-7 December 2018. Abidjan, Ivory Coast. For more information: www.icac.org and SEE HERE >>
  • Sourcing at Magic - Trade Show - 4-7 February 2019. Las Vegas, United States. For more information: www.ubmfashion.com
  • Morocco Fashion & Textile - Trade Show - 28-31 March 2019. Casablanca, Morocco, For more information: www.moroccostyle.net
  • Source Africa - Trade Show - 12-14 June 2019. Cape Town, South Africa. For more information: www.sourceafrica.co.za
 
CLASSIFIEDS
JOBS
TENDERS & PROCUREMENT
MANUFACTURING EQUIPMENT WANTED / FOR SALE
Looking for staff? Want to engage a consultant? Have equipment to sell? Do you need 2nd hand machinery? Have a tender? For a limited period the "African Cotton, Textiles & Apparel Monitor" will publish (free of charge) select classified advertisements from firms / development organisations active in the Africa's crop to shop value chain. Adverts limited to 50 words / 300 characters (and may include a mini logo).
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TRANSLATORS - SOCIAL & LABOUR COMPLIANCE AUDITING
I get repeated requests from environmental and labour compliance auditing bodies for in-country staff who can assist them with translations when they are undertaking in country audits. If you know of any individuals/organisations who could undertake these kinds of services kindly let me know their details. Country, language competencies, names, contact details please. editor@africantextilesandapparel.com
 
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about Mark Bennett - Editor

"The African Cotton, Textiles & Apparel Monitor"
I have almost 30 years' experience working in Africa's cotton, textiles and apparel value chain. Initially I was, for 15 years, a sector trade unionist in South Africa; then, from 2004 onwards, I worked as a development consultant for various Southern / Eastern African governments, and domestic private sectors. In my development activities I have been engaged by private sector foundations, and by DFID and USAID funded contractors. I find it rewarding creating development interventions that help cotton, textiles and apparel stakeholders to better processes, improve productivity, increase sales and add investment. See my full CV at Devex or LinkedIn.
 
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